Q&A Area for Tax Audit, Investigation & Appeal

What are the questions on Tax Audit, Investigation & Appeal that is bugging your mind ?

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    Reply Reply August 15, 2017

    Dear Dato & Frank

    Thank you for your amazing sharing. I did learn a lot from both of you. You both did a very great job. Congratulation.

    Here I have a question in my mind for sometime but don’t know who I could channel to… hope Dato & Frank help to solved this…

    The question sound as
    Is someone did “Forex Trading” as their living income. Is she need to report income? how personal tax or LHDN come into this picture? How to report his income? More over with Bitcoin and blockchain introduce to the world more Forex income convert to Bitcoin (BTC) but not RM or USD that more difficult to LHDN go into it. What is your point of view?

    Thank you for your kind attenation.


  • Claris

    Reply Reply August 16, 2017

    1) How does irb identify the target group for tax audit?
    What are the criteria to put a person in the high risk target group for tax audit?
    Will irb normally audit retiree (former employee)? He was paying tax based on employment income and stop paying tax upon retirement.

    2) If someone never audited by irb for the past 20 years during employment, does it increase the probability for him to be audited by irb one of these day?

    3) What is the max years of tax record must the tax payer keep?

    4) Assuming irb requested for 5 years tax record. However, tax record for one of the year not available due to docs destroyed in a fire hazards. How will irb handle this case as taxpayer not able to show tax doc due to fire hazards?


  • sow mei ying

    Reply Reply August 17, 2017

    Dear Data & Frank,

    This is regarding the the validity of documents. I would like to ask what would IRB say if i have recorded a supplier sales invoices where there is no header of invoice (no company name no sign-off etc), just a description of goods and service whereby the supplier demand cash payment only or cheque payment to personal bank account?

  • Liew

    Reply Reply August 23, 2017

    how RPGT can tax at company tax?

  • Evanna

    Reply Reply August 23, 2017

    on behalf of Liew during live webinar

    Frank – Tax Investigation (Pitfall)

    how come RPGT change to company tax?

  • Douglas

    Reply Reply August 23, 2017

    HI Ms Evanna,

    Kindly give the name and contact number of Frank and Dato for consulatation if clients have tax problem.

    Thanks for your kindness.



  • sow mei ying

    Reply Reply August 23, 2017

    Dear Dato and Frank,

    This is regarding the threshold of accounting error and mistakes (human mistakes)
    We are used to learn that IRB is very keen in detecting wrongdoing of tax payers especially in under declaring sales or omitting certain documents. What if the officers have detected accounting errors or mistakes such as expenses was left out unintentionally? and this expense is valid with supporting documents and resulted in overpayment of tax.
    My question is, do IRB has a threshold or any materiality set in their tax audit? as accountants are also human being, 100% checking and found out minimal accounting mistakes by officers and they are not happy also and directly pointed to the tax payers said they got intention on tax evasion. This situation happened most in those business that are not required audit work, and what can the tax payers do if they face this kind of situation?

  • sow mei ying

    Reply Reply September 7, 2017

    Dear Dato and Frank,

    Since gst implementation and we found out there is some grey area in doing tax computation. Technical wise in GST there are some areas like those utilities bills has to be in business owners’ name so that can claim GST as input tax. What if those bosses in SME industry does not fulfil the requirements or the bosses let go the chance to claim it and these GST charges have been considered a cost to the company’s account. This seems to be an issue as no IRB guideline saying whether is an allowable expense or not and is considered a grey area.

    My question is, how would IRB sees this kind of issue as this consider a risk to the company if treated as allowable expense but a loss to the company if it not claim in their income tax computation.

  • sow mei ying

    Reply Reply September 7, 2017

    Dear Dato and Frank,

    We have also come across that there are so many letters replied to IRB on the assets or income audit request and no feedback from IRB after half a year or more. Is it considered case closed?

  • Lim Thian Loong

    Reply Reply September 7, 2017

    Hi Dato and Frank

    Thank you for the sharing. Here are my questions:

    1. Is it compulsory that during the Special Commisioners of Income Tax hearing, a tax agent or lawyer to represent the tax appeal? What if the taxpayer is competent with his tax knowledge or experience without tax agent and/or lawyer representation in the SCIT hearing? Will the chairman of SCIT insisting that a tax agent or lawyer to represent the tax appeal hearing?

    2. A Sdn Bhd always practises that the director paid on behalf of purchases and operating expenses and later when the company cashflow improve, the company will reimburse to the director. How does LHDN view on these purchases and operating expenses on the deductibility assuming all these are genuine in nature in the course of his business. How can these be defended when challenge by LHDN?

  • Evanna Miss8

    Reply Reply September 7, 2017

    Lee, “How long does IRB normally come out with their findins after a tax field audit”

  • Evanna Miss8

    Reply Reply September 7, 2017

    tn: My cousin has been paying tax on schedule when she was under employment. Years later, she received letter from income tax which shows that she has tax outstanding. They did not specifically mention but she understood that it is due to some tax calculation error.

    However she is not working now and the instalment that they insist is not within her ability. She has received court orders before. The income tax department has requested for her to supply bank details for them to consider lowering the tax instalment. She was told by friends against doing so. SShe is now paying small amount each month and would like to know if there is any issue if she continues paying every month.

  • James Ling

    Reply Reply November 6, 2017

    What are the criterias of tax exempted foreign income?
    How to prove it?

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